Gold market: how to buy and sell this precious metal

Gold is a safe value, but before investing in it it is important to know this market and know what alternatives exist to make it profitable and sell it more easily. Here we tell you.

Gold is a safe haven, especially in times of economic uncertainty. One of its main advantages is that it maintains its value even if the price of the shares falls or inflation takes off, which makes it a strategic and very interesting complement to diversify investments gold ira companies reviews.

However, investing in gold cannot only be intended to be a lifeline against economic unforeseen events, but ultimately (like any other) has to seek return and economic performance. That is why it is of little use to acquire this precious metal if we do not know the alternatives that exist to sell it, the points of purchase or sale that exist and the characteristics of this market.

Before making any type of investment, we must have certain notions about the market in which we are going to put our money. That gold is a safe value does not mean that it is easy to sell and that anyone will be willing to buy it.

For example, not all investors want gold in physical format (coins, bullion, etc.) and if you have acquired it through a distributor, this has exclusivity and when you want to sell it you will have to do it through him.

Characteristics of the gold market

In liquid financial markets the difference between the purchase price and the sale price is called the “spread”. Gold dealers do business on precisely that margin, selling it at a higher price than it cost them.

Therefore, if you buy gold from a dealer, it will be more expensive than at market price, and when you want to sell it you will have to do it for a lower price.

According to investors and experts, coins and bullion tend to still have a very high spread. The best thing is that you buy gold bars or ounces, because their price is more adjusted to the “real” one.

Another advantage of gold is that its purchase does not carry derived taxes of any kind, although it will not be cheap for that: storage, insurance and delivery services to the buyer have costs and commissions, and they are usually high.

It is best to buy several currencies: although the “spread” of this format is higher, they offer greater flexibility, in the sense that when you want to sell them, you can do it little by little. If you buy a bar or a bar of many grams, you will have to get rid of it in one go.

Alternatives to buying physical gold

As we have already said, physically owning gold and trying to sell it yourself is not an easy task. That is why there are alternatives to make it profitable without worrying about storing them and that offer more buying and selling facilities:

  • Stock market:  ETFs (Exchange Traded Funds) on the price of gold are exchange-traded funds that use gold as an underlying and replicate its valuation. It is halfway between stocks and mutual funds, they do not expire and are easier to buy than physical gold. Its weak point is that it has additional commissions to the earnings and that some funds do not have the amount of gold that they claim.
  • Online investment platform: in them you can buy and sell gold 24 hours a day and you can request the shipment of bullion at any time. These are kept safely in vaults and the cost of custody is not very high. One of the most famous is Bullion Vault.

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Assigned Gold Accounts: These accounts ensure that the bank keeps your portion of gold in its vault somewhere directly attributable to you. The entity cannot use it for any other purpose beyond keeping it safe. The costs for this backup service are usually high.

Mining stocks:  Another option is to invest in shares of mining companies that are responsible for extracting the metal. If the price of gold increases, they also benefit. Although this investment has more risks than the direct acquisition of gold, because external factors influence these companies that can affect mining operations.